North American FX Open - NFIB spikes on Trump euphoria

Just ahead of Open, the US NFIB small business optimism spiked in November to 101.7 vs the 95.3 consensus and 93.7 the month previous.

That was a highest reading since June 2021 on the perceived more favorable economic policies under Trump 2.0. Firms have cited optimism on tax and regulation policies that will support strong economic growth as well as relief from inflationary pressures.

Still to come, US final Q3 non-farm productivity and unit labour costs are scheduled.

Also this session, the sale of Usd 58bln 3-year notes.

USD/YEN starts the day firmer, perhaps further buoyed by media reports that Nippon Life Insurance is in the final stages of a buyout deal for the Usd 8.0bln-plus valued US life insurer Resolution Life Group Holdings. And, famed investment strategist Yardeni remarked the Fed should keep rates unchanged this month to see how the economy evolves. Remember we're in the midst of the Fed blackout period ahead of the decision on the 18th.

AUD/USD independently moved softer after the RBA held its key interest rate at a 13-year high of 4.35% as expected, but signaled it’s making some progress in the effort to tame inflation and some traders increased bets on February easing chances. Also, Australia NAB business confidence fell away in November to -3 vs +5 the month previous, a sign that the economy's private sector is underperforming.

EUR/USD tops for now at 1.0630 and trades just off a new three day low of 1.0523, as Bbg reports French President Macron will bring together a broad group of political parties today as he looks for a new PM. The rightist National Rally said it wasn’t invited to the consultations.

The USD though is fairly mixed at the start of the day.

USD/CAD trades well off earlier new 2024 highs of 1.4195, coinciding with PM Trudeau saying Canada “will respond” if US President-elect Trump imposes new tariffs on Canadian imports, and argued that retaliatory tariffs were successful when Trump put tariffs on Canadian steel and aluminum in 2018.

Meanwhile, Bbg reports US lawmakers have a rough plan to avoid a government shutdown next week. Funding is said to expire on the 20th and negotiators said they’ll probably use a continuing resolution to keep agencies going into March. They’ll also tack on a disaster aid package.

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